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# System prepended metadata

title: '[CONSTITUTIONAL] AIP: DVP Quorum'

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# Constitutional

## Abstract

This AIP proposes to upgrade the on-chain voting system for the ArbitrumDAO’s governance contracts. The upgrade focuses on changing how the quorum threshold is computed such that it is a fixed percentage of the total Delegated Voting Power (DVP), impacting the quorum threshold for constitutional and non-constitutional proposals.

Through this temperature check, we aim to collect community sentiment on DVP Quorum. The exact parameters of the system will be confirmed through a separate Snapshot closer to the on-chain proposal. This will give the community more time to discuss the parameters and allow OCL to start working on the implementation in parallel.

## Motivation & Rationale

The ArbitrumDAO has been struggling to achieve quorum on constitutional proposals. The gap between participation and quorum has been shrinking and has now become alarmingly low.If no tokens are excluded from voting, quorum currently increases at 36M ARB/year for non-constitutional proposals, and 54M ARB/year for constitutional proposals. It will soon reach a point where active voting power available is no longer greater than quorum, bringing the DAO to a standstill. This proposal aims to avoid such a scenario and provide a long term fix to ArbitrumDAO’s quorum issues.

The situation at hand is fueled by two fundamental issues. Firstly, quorum is computed based on the total voteable supply which has no relationship to the tokens registered to vote. Secondly, delegated voting power has remained relatively unchanged over time. Together, this has led to a scenario where the quorum threshold is increasing, but the total voting power is steady. This proposal focuses on addressing the first issue by redefining the quorum computation logic. Increasing DVP is a separate endeavour that should be pursued to further strengthen Arbitrum governance.

Kindly refer to this recently published [research report](https://forum.arbitrum.foundation/t/dvp-quorum-for-arbitrumdao/29996) and [Dune dashboard](https://dune.com/_amanwithwings/arb-dao-quorum) that explores the current situation in greater detail. The report supports moving to a DVP-based quorum model as it has several advantages including alignment with voter registration and not requiring token holders to actively exclude their votes from the votable supply. A DVP-based solution also preserves the fundamental properties of the existing voting system such as one token one vote and the ability for an external party to easily evaluate whether quorum has been reached.

## Specifications

### Proposed Quorum Model

This proposal seeks to replace the current voteable-supply-based quorum definition with a Delegated Voting Power (DVP)-based definition:

`Quorum = max (ɑ*DVP, baseline quorum), where ɑ and baseline quorum are constants`
* ɑ will have different values for non-constitutional and constitutional proposals
* Similarly, baseline quorum will be different for non-constitutional and constitutional proposals

The formula ensures that quorum varies as a fixed percentage of DVP (ɑ*DVP), unless the baseline quorum is greater. The graph below shows how quorum would change with DVP if we choose an ɑ value of 0.5 and a baseline quorum of 150M ARB.

![1](https://hackmd.io/_uploads/Hyea6Cmpxg.png)


This [research report](https://forum.arbitrum.foundation/t/dvp-quorum-for-arbitrumdao/29996) recommends choosing an ɑ value in the [0.4, 0.5] range with non-constitutional and constitutional quorum tending towards the lower and upper end of that range respectively. The report suggests 100M ARB as the baseline quorum value for non-constitutional proposals and 150M as the baseline quorum value for constitutional proposals. However, we will refrain from asking the DAO to vote on the exact quorum parameters at this stage. Parameters will be confirmed through a separate Snapshot closer to the on-chain proposal so that the community has more time to inform its decision.

To implement the proposed solution, the following smart-contract level changes need to be made:

1. The $ARB token contract needs to be upgraded to keep a running total that is updated on each delegation change and token transfer.
2. The DAO governor contracts need to be upgraded to use the new total DVP metric. Existing calculations need to be replaced with DVP-based thresholds.

Offchain Labs will be taking on the development and testing of the proposed upgrades. An untested, unaudited PoC of the token contract upgrade can be found [here](https://github.com/ArbitrumFoundation/governance/compare/d13b123...c18ff53fbb).

## Voting Options

Through this temperature check, we aim to collect community sentiment on DVP Quorum. The proposal will include the following voting options:

* For DVP Quorum
* Against DVP Quorum
* Abstain

Should *For DVP Quorum* be the majority preference, OCL will begin work on the implementation, including production-ready code and the necessary audits. The exact parameters of the DVP Quorum model (ɑ and baseline quorum values) will be determined through a separate Snapshot closer to the on-chain proposal.